February 2022
24Feb

China starts nationwide pooling of basic pension funds

China has started nationwide pooling of basic pension funds since Jan. 1 this year, Vice Minister of Finance Yu Weiping said Tuesday. Read also China to allow more pension providers The move will allow pension funds to be transfered from regions with surplus to regions with deficit, Yu said at a press conference, adding the ministry is drawing up related documents and will strengthen guidance to localities. Read also China releases 5-year plan for elderly care services Qi Tao, an official from the...

February 24, 2022
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17Feb

Retirement in America: Time to rethink and retool

By PWC A range of factors have put intensifying pressures on the US retirement system in recent years, leaving the industry facing a decelerating revenue growth outlook. A number of these challenges — fee pressure, underfunded retirement plans, an aging population — are structural and unlikely to ease. Many retirement players have been unable to outrun even one of these factors: fee pressure. Rising industry-wide fee pressure is placing constraints on the profitability of US retirement firms with average 401(k)...

February 17, 2022
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04Feb

US. Public pension plans stay on cost-efficient course – NCPERS

Public retirement systems continued to manage expenses in fiscal 2021, with many also reducing their assumed rates of return, according to an annual study released Wednesday by the National Conference on Public Employee Retirement Systems. In fiscal 2021, the pension systems averaged 54 basis points in administrative costs and investment manager fees, down from 60 basis points the year before. Read also U.S. corporate pension plan funding rises slightly in January – 2 reports Systems lowered their assumed rates of returns to...

February 4, 2022
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03Feb

Do pensions have real teeth? Evidence from the state government borrowing costs

By Sumit Agarwal, Chunlin Liu, Qiyuan Peng, Qun Wu & Ting Zhang Yes, they do. State governments with risky defined benefit pension plans have higher borrowing costs, as measured by larger bond offering yield spreads. To control for the potential endogenous issue, we utilize the instruments of actuarial firms’ reputation, and direct flight between the state capital and actuarial firm headquarter. We further identify the relation between pension plan investment risks and borrowing costs using two quasi-experimental shocks: the introduction...

February 3, 2022
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03Feb

U.S. corporate pension plan funding rises slightly in January – 2 reports

The estimated funding ratio of U.S. corporate pension plans inched upward in January as a drop in liabilities offset sluggish investment returns, two new reports from Wilshire Consulting and Legal & General Investment Management America show. Wilshire's monthly report noted that the aggregate funding ratio for U.S. corporate plans increased by 0.4 percentage points to 95.8% as of Jan. 31 from Dec. 31. The slight increase in funding resulted from a 5-percentage-point decrease in liabilities that was partially offset by...

February 3, 2022
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January 2022
28Jan

Puerto Rico updated fiscal plan directs $10.3 billion to pension trust

Puerto Rico can avoid budget deficits for the next quarter century because federal funds will help drive economic growth on the island as it exits bankruptcy, the commonwealth's congressionally appointed financial oversight board said. The board Thursday unanimously approved a revised multiyear fiscal plan that incorporates federal funds that Congress authorized in the last year, an increase in federal Medicaid funding that's expected to save Puerto Rico $6 billion through fiscal 2026, and a new pension reserve trust that will...

January 28, 2022
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24Jan

Companies’ U.S. Pension Plans Are More Overfunded Than They Have Been in Years

Companies’ U.S. pension plans are more overfunded than they have been in years amid strong equity markets. Those surpluses will likely go up further if long-term corporate bond yields continue to rise, as many of these plans use those yields to value their liabilities. That could prompt finance chiefs to revise their pension strategies. An estimated 40 of the largest 100 U.S. pension plans were funded at 100% or more in 2021, the most since 2007, and up from 16 in...

January 24, 2022
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21Jan

Pension Funding Index January 2022

By Zorast Wadia & Charles J. Clark Corporate pension plans experienced a win-win year in 2021, with an investment gain of 8.33% alongside increasing discount rates and a cumulative liability return (e.g., the projected benefit obligation decrease) of -1.96%. The result was a staggering $183 billion improvement in the funded status deficit of the Milliman 100 Pension Funding Index (PFI), the second-largest in the report’s history (exceeded only by the $204 billion improvement in 2013). In 2021, corporate pension asset returns...

January 21, 2022
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21Jan

U.S. Pension Funds Hold Clue to Relief for Slumping Treasuries

U.S. pension funds may be primed to take advantage of higher yields in global bonds and could put a floor on the market’s slump. Pension funding versus liabilities was close to 100% at the end of 2021, for the first time since the financial crisis, according to investment advisory firm Milliman, based on data from 100 U.S. public companies sponsoring the largest defined benefit pension plans. Such funds could be “keen to lock in” that status and turn to the...

January 21, 2022
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19Jan

Puerto Rico gets green light to end five-year bankruptcy

The judge overseeing Puerto Rico’s nearly five-year-long debt restructuring process has approved a debt adjustment plan that is intended to revitalize the commonwealth’s economy and reduce its $135 billion in liabilities. Read also UK. More universities join USS strike U.S. District Judge Laura Taylor Swain approved the plan in an order filed on Tuesday, bringing nearly half a decade of litigation over Puerto Rico’s financial standing to a close and marking a historic moment for the largest-ever U.S. municipal debt restructuring. Read...

January 19, 2022
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